Getting to the Top of Mind: How Reminders Increase Saving

We develop and test a simple model of limited attention inintertemporal choice. The model posits that individuals fully attendto consumption in all periods but fail to attend to some future lumpyexpenditure opportunities. This asymmetry generates some predictionsthat overlap with models of present-bias. Our model also generatesthe unique predictions that reminders may increase saving, and thatreminders will be more effective when they increase the salience of aspecific expenditure. We find support for these predictions in threefield experiments that randomly assign reminders to new savingsaccount holders.